PRINCIPAL COMMISSIONER OF INCOME TAX-7 vs. PLANMAN HR PVT. LTD.

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ITA/170/2018HC DelhiDLHC01034336201812 February 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for consideration. The Tribunal (ITAT) had relied on the previous decision of the Delhi High Court in Commissioner of Income Tax v. AIMIL Ltd. & Ors. (2010) 321 ITR 508 (Del.). This Delhi High Court judgment, in turn, had relied upon the Supreme Court ruling in Commissioner of Income Tax v. Vinay Cement Ltd. (2009) 313 ITR 1 (SC). Since the issue was covered by established precedents from the High Court and the Supreme Court, and the ITAT had merely applied the ratio of these decisions, the Revenue's appeal was dismissed. The operative direction was the dismissal of the appeal.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax-7, appealed against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had ruled in favour of the assessee, Planman HR Pvt. Ltd. The core of the dispute involved the disallowance of amounts claimed by the assessee, which the Assessing Officer (AO) held to be subject to deduction under Section 36(1)(va) of the Income Tax Act, 1961. These amounts represented the employees' share of contributions made towards employee welfare schemes under the Employees' Provident Funds Act, 1952, and the Employees' State Insurance Act, 1948. The ITAT's decision was based on prior judgments of the Delhi High Court and the Supreme Court.

What were the issues?

1. Whether the ITAT erred in holding that Section 43B of the Income Tax Act, 1961, was not applicable to the employees' share of contributions to provident fund and ESI, when the AO had disallowed these amounts, treating them as deductible under Section 36(1)(va)? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the ITAT's decision, which was upheld, implies that the assessee likely argued that the disallowance by the AO was incorrect and that the amounts were indeed deductible. Revenue's Contention: The Revenue sought to urge a question of law regarding the applicability of Section 43B of the Act. The Revenue's appeal was based on the AO's disallowance of amounts claimed by the assessee, which the AO considered deductible under Section 36(1)(va). The Revenue likely argued that these contributions, if not paid within the due date, should be disallowed under Section 43B.

Which sections of the Income-tax Act were involved?

Section 43B,Section 36(1)(va)

AI-generated summary — verify with the full judgment below

$~28 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 170/2018

PRINCIPAL COMMISSIONER OF INCOME TAX-7 ..... Appellant Through: Mr. Sanjay Kumar & Mr. Rahul Chaudhary, Standing Counsels for Revenue.

versus

PLANMAN HR PVT. LTD.

..... Respondent Through: Mr. Ved Jain with Mr. Pranjal Srivastava, Advs.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

12.02.2018

The question of law sought to be urged by the Revenue is with respect to the applicability of Section 43B of the Income Tax Act, 1961 (hereafter referred to as “the Act”). The AO had disallowed amounts claimed, by the assessee holding them to be subject to deduction under Section 36(1)(va). The amounts were the employees’ share of the contributions made for the employees’ welfare in the relevant schemes in the Employees’ Provident Funds Act, 1952 and the Employees State Insurance Act, 1948. The ITAT went by the previous decision of this Court in Commissioner of Income Tax v. AIMIL Ltd. & Ors. (2010) 321 ITR 508 (Del.). ITA No.170/2018

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That judgment had relied upon the Supreme Court ruling in Commissioner of Income Tax v. Vinay Cement Ltd. (2009) 313 ITR 1 (SC). Since the issue is covered by rulings of this Court and the ITAT merely applied the ratio in those decisions, no question of law arises. The appeal is dismissed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J FEBRUARY 12, 2018 kks

ITA No.170/2018

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